QE3 Will Bring Even Lower CD Rates & Mortgage Rates

Debt issues in Europe and slowing economies around the world will probably bring another round of quantitative easing from the U.S. Federal Reserve according to a recent survey. In CNBC's "snap" survey 58 market professionals believe the Fed will start another around of quantitative easing sometime over the next year. That's up from 33 professionals just 6 weeks ago.

You can find the lowest mortgage rates here: MonitorBankRates.com/Mortgages

Quantitative easing (QE3) will force interest rates lower just as QE1 and QE2 were designed to do. Whether or not lower interest rates will help the economy is debatable since interest rates are already very low. Current CD rates, savings rates, mortgage rates and all banking product rates are at record lows.

The previous rounds of QE helped force mortgage rates to record lows but hasn't helped the housing market recover or even stabilize housing prices. Mortgage rates today on 30 year and 15 year conforming loans are at record lows. Low refinance rates have spurred higher refinance activity but millions of homeowners are unable to refinance because they have negative equity in their home.

Savings account rates and CD rates also at record lows will go even lower if QE3 becomes a reality. The average 1 year CD rate on our rate table right now is at 0.71 percent. The best CD rates on our 1 year rate tables are just above 1 percent. You can bet the highest 1 year rates will be under 1.00 percent if we get QE3.

Right now there are many banks on our list with rates above 1 percent including CIT Bank, Barclays Bank, Ally Bank, MetLife Bank.  CIT Bank has the highest CD rate at 1.09 percent with an APY of 1.10 percent.

Long term bank CD rates are just as low. Current 5 year CD rates at banks are averaging just 1.38 percent, not much higher than 1 year rates. We'll probably see the average 5 year rate drop below 1.25 percent with QE3.

There are many banks offering 5 year rates above the average on our rate table including American Express Bank, Ally Bank, Third Federal Savings & Loan and Barclays Bank. The highest CD rates on 5 year CDs is from Barclays Bank at 1.78 percent with an APY of 1.80 percent.